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Deutsche Bank Downgrades Genco Shipping & Trading (GNK) To 'Sell'

 October 19, 2012 03:12 PM

(By Balachander) Deutsche Bank analyst Justin Yagerman downgraded his rating on shares of Genco Shipping & Trading Ltd. (NYSE: GNK) to "Sell" from "Hold".

Yagerman wrote that shares have rallied 16.7 percent since Q2 (vs. the S&P 500's 7.0 percent gain) and asset values have declined.

However, the analyst said his current NAV estimate is negative $6/share, down from negative $5/share in August.

"While GNK has ample liquidity to weather a weak 2013, loan repayment waivers expire in 2014 and unless the market materially recovers, liquidity risk will once again return," Yagerman wrote in a note.

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Yagerman, who has a price target of $2 on the stock, expects the current support for GNK's share price to dissipate moving through Q4 and rates once again decline into 2013.

Genco Shipping & Trading is an international ship owning company based in New York. It transport iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes.

Excluding Baltic Trading's vessels, Genco owns a fleet of 53 drybulk vessels, consisting of nine Capesize, eight Panamax, 17 Supramax, six Handymax and 13 Handysize vessels.

Shares of GNK retreated 3.09 percent or 11 cents to trade at $3.45 on Friday. Over the past year, the stock has been trading in the range of $2.09 to $10.12.

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